Cleveland Tax Law Blog

Most Ohio residents likely hang on to old tax documents for a few years. While rare, if audited officials at the Internal Revenue Service may request tax-related documents that are three or more years old. For small business owners, tax matters are typically more complex and include the added pressure of keeping track of business-related expenditures including those related to employees and payroll.

Business owners with employees are required to pay payroll taxes on those employees. While the IRS denies singling out small business owners for tax audits, small business owners seem to be disproportionately subjected to IRS audits. One recent tax court case shows how a business owner may be liable for tax errors long after the assumed statute of limitations has passed.

Shrouded in secrecy and feared by many, the Internal Revenue Service is often vilified. While most Americans will never encounter the dreaded IRS audit, most don't fully understand the audit selection process. For fairly obvious reasons, IRS officials do not share exactly how the agency selects taxpayers for an audit. There is, however, data available related to who is at risk for being audited as well as how the typical audit process proceeds.

In short, the more money an individuals makes, the more likely he or she will be audited. While the IRS contends income alone does not dictate who will be audited, taxpayers with reported incomes in excess of $10 million are nearly 30 percent more likely to be audited.

It's finally June and Ohio residents who endured a brutal winter and unusually chilly spring are able to enjoy the warmth and sun. As many Ohioans are busy planning summer vacations and activities, others are busy getting tax documents in order. That's right, taxes in June. While the deadline to file and pay tax returns was April 15 for most Americans, for those who were out of the country during April or living abroad, June is a critical tax month.

June 17 marks the official IRS deadline for those individuals who were out of the country on the normal April 15 tax deadline. In order to qualify for the two-month extension, individuals must have been living outside of the United States on April 15. While individuals are not required to file any additional paperwork to qualify for the two-month extension, taxpayers must submit documentation to support that they were indeed living abroad when the April 15 deadline rolled around. Many active duty members of the military qualify for this automatic extension.

Death and taxes are often referred to as the two constants in life. Under U.S. law, there are very definite circumstances which require an individual to file a tax return. Even individuals who are retired or not employed must file tax returns if they had federal funds withheld from a pension, receive Social Security income, or have retirement accounts such as a 401(k) or IRA. In some cases, U.S. citizens falsely believe they are not required to file or pay taxes. In other cases, U.S. citizens wrongly believe they are entitled to monies held in imaginary government-backed bonds and trusts.

One 69-year-old woman was recently found guilty of several tax crimes in relation to falsely claiming $3 million in federal tax refunds. The 69-year-old was affiliated with an organization known as the Mid-Atlantic Trustees and Administrators or MATA. The group encourages U.S. citizens to claim income related to imaginary U.S. bonds and trusts.